NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES ("U.S.")

The news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release.

Strad Energy Services Ltd., (TSX:SDY) ("Strad" or the "Company"), a North American-focused, energy services company, today announced its financial results for the three and nine months ended September 30, 2016. All amounts are stated in Canadian dollars unless otherwise noted.

THIRD QUARTER SELECTED FINANCIAL AND OPERATIONAL HIGHLIGHTS:

Adjusted EBITDA(1) of $1.2 million compared to $4.0 million for the same period in 2015. Adjusted EBITDA excluding acquisition related transaction costs would otherwise be $2.4 million;

Closed the acquisition of Redneck Oilfield Services Ltd. ("Redneck") and Raptor Oilfield Services Ltd. ("Raptor"), together the "Redneck acquisition" on August 31, 2016;

Loss per share was $(0.09) compared to $(0.55) for the same period in 2015. Loss per share excluding restructuring, severance and acquisition related costs would otherwise be $(0.06);

Revenue of $20.3 million decreased 20% compared to $25.3 million for the same period in 2015;

Total funded debt(2) to EBITDA(3) ratio was 3.2 to 1.0 at the end of the third quarter of 2016;

Capital additions totaled $3.2 million during the third quarter of 2016.

Notes:

(1)

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

EBITDA is based on trailing twelve months adjusted EBITDA plus share based payments, plus additional one time charges.

"We noted a marked improvement in customer sentiment during the third quarter on the strength of improving commodity prices which led to increased rig counts and utilization of our equipment fleet," said Andy Pernal, President and Chief Executive Officer of Strad. "We continued to gain momentum in our energy infrastructure customer segment during the third quarter with the successful deployment of the largest single matting project in the Company's history. The acquisition of Redneck Oilfield Services Ltd. and Raptor Oilfield Services Ltd. and their addition to the Strad family during the third quarter has created positive momentum for the combined entity, which we plan to take advantage of during the remainder of 2016 and into 2017."

"For the first time since March of 2015, our debt increased during the third quarter in connection with the acquisition of Redneck and Raptor, working capital investment as activity levels increased and capital additions to support our energy infrastructure customer segment," said Michael Donovan, Chief Financial Officer of Strad. "The strength of our balance sheet that we have worked hard to build and maintain through this downturn has provided us with the ability to take advantage of opportunities to grow both organically and through strategic transactions. Our focus will continue to be on maintaining cost discipline and debt repayment as activity levels begin to increase through the remainder of 2016 and into 2017."

THIRD QUARTER FINANCIAL HIGHLIGHTS

(in thousands of Canadian Dollars, except per share amounts)

Three months ended September 30,

Nine months ended September 30,

2016

2015

% Chg.

2016

2015

% Chg.

Revenue

20,277

25,299

(20

)

45,115

89,576

(50

)

Adjusted EBITDA(1)

1,247

4,021

(69

)

(338

)

14,932

(102

)

Adjusted EBITDA as a % of revenue

6

%

16

%

(1

)%

17

%

Per share ($), basic

0.03

0.11

(73

)

(0.01

)

0.40

(103

)

Per share ($), diluted

0.03

0.11

(73

)

(0.01

)

0.40

(103

)

Net (loss) income

(3,746

)

(20,362

)

(82

)

(13,697

)

(22,045

)

(38

)

Per share ($), basic

(0.09

)

(0.55

)

(0.36

)

(0.60

)

Per share ($), diluted

(0.09

)

(0.55

)

(0.36

)

(0.60

)

Funds from operations(2)

1,523

4,120

(63

)

1,659

15,539

(89

)

Per share ($), basic

0.04

0.11

(64

)

0.04

0.42

(90

)

Per share ($), diluted

0.04

0.11

(64

)

0.04

0.42

(90

)

Capital expenditures(3)

3,215

769

318

3,871

8,278

(53

)

Total assets

188,965

188,894

-

188,965

188,894

-

Long-term debt

25,761

18,500

39

25,761

18,500

39

Total long-term liabilities

37,171

29,248

27

37,171

29,248

27

Common shares - end of period ('000's)

48,379

37,280

48,379

37,280

Weighted avg common shares ('000's)

Basic

40,493

36,916

38,123

36,914

Diluted

40,493

36,916

38,123

36,914

Notes:

(1)

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

(2)

Funds from operations is cash flow from operating activities excluding changes in working capital and foreign exchange gains and losses. Funds from operations is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

(3)

Includes assets acquired under finance lease and purchases of intangible assets.

FINANCIAL POSITION AND RATIOS

As at September 30,

($000's except ratios)

2016

2015

Working capital(1)

9,967

12,391

Funded debt(2)

30,174

25,196

Total assets

188,965

188,894

Funded debt to EBITDA(3)

3.2 : 1.0

0.8 : 1.0

Notes:

(1)

Working capital is calculated as current assets less current liabilities.

EBITDA is based on trailing twelve months adjusted EBITDA plus share based payments, plus additional one time charges. See "Non-IFRS Measures Reconciliation".

THIRD QUARTER RESULTS

Strad reported a decrease in revenue of 20% and a decrease in adjusted EBITDA of 69% during the three months ended September 30, 2016, compared to the same period in 2015. Decreased revenue during the third quarter was a result of reduced equipment utilization and pricing in the United States ("U.S.") due to a significant decline in rig activity levels year-over-year offset by slightly higher Product sales. Adjusted EBITDA margin percentage in the third quarter of 2016 decreased to 6% compared to 16% in the prior year, due to the decrease in overall revenue during the quarter and severance and transaction cost of $1.2 million.

Strad's Canadian Operations reported an increase in revenue of 3% and a decrease in adjusted EBITDA of 15% during the three months ended September 30, 2016, compared to the same period in 2015. Increased revenue was a result of an increase in activity levels towards the end of the third quarter, the inclusion of Redneck and Raptor and a higher utilization rate in matting fleets despite a decrease of 36% in the average drilling rig count to 119 rigs during Q3 2016 compared to 187 for the same period in 2015.

Rig counts in Strad's targeted U.S. resource plays were also significantly lower year-over-year during the third quarter of 2016 compared to the same period in 2015. Rig counts in the Bakken, Rockies and Marcellus regions decreased by 61%, 49%, and 49%, respectively, year-over-year. The rig count declines resulted in a 66% decrease in revenue during the third quarter of 2016 compared to 2015. As a result of lower revenue, adjusted EBITDA decreased 125% and adjusted EBITDA as a percentage of revenue decreased to (11%) during the third quarter of 2016 compared to 15% in the third quarter of 2015.

During the third quarter of 2016, capital expenditures were $2.4 million in Canada and $0.8 million in the U.S. Strad's 2016 capital budget of $7.3 million will be evaluated during the year based on affordability and activity levels.

RESULTS OF OPERATIONS

Canadian Operations

Three months ended September 30,

Nine months ended September 30,

($000's)

2016

2015

% chg.

2016

2015

% chg.

Revenue

13,730

13,359

3

27,139

46,337

(41

)

Operating expenses

9,726

8,492

15

19,557

30,646

(36

)

Selling, general and administrative

1,462

1,877

(22

)

3,775

5,564

(32

)

Share based payments

27

23

68

79

Net income

2,202

(8,423

)

1,951

(7,132

)

Adjusted EBITDA(1)

2,515

2,967

(15

)

3,739

10,051

(63

)

Adjusted EBITDA as a % of revenue

18

%

22

%

14

%

22

%

Capital expenditures(2)

2,440

292

736

2,549

5,675

(55

)

Gross capital assets

147,036

118,527

24

147,036

118,527

24

Total assets

114,402

89,359

28

114,402

89,359

28

Notes:

(1)

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

(2)

Includes assets acquired under finance lease and purchases of intangible assets.

Revenue for the three months ended September 30, 2016, of $13.7 million increased 3% compared to $13.4 million for the same period in 2015. Increased revenue during the quarter was primarily a result of higher rental revenue from the matting fleets as there was a increase in activity levels and the inclusion of one month of Redneck and Raptor results in Canadian operations. This was offset by price declines and utilization levels for surface equipment declining by 30% during the third quarter of 2016, compared to the same period in 2015, due to a 36% decline in average rig count in the WCSB over the same time period. Low commodity prices continued to cause the decline in rig count during the third quarter of 2016 as Strad's customers reduced capital spending.

During the third quarter, revenue from Strad's matting rental fleet increased to approximately 64,800 pieces as at September 30, 2016, compared to approximately 51,800 pieces as at September 30, 2015. Utilization increased 31% during the third quarter of 2016, compared to the third quarter of 2015, due to the increase in energy infrastructure projects.

Adjusted EBITDA for the three months ended September 30, 2016, of $2.5 million, decreased 15% compared to $3.0 million for the same period in 2015. Adjusted EBITDA as a percentage of revenue, for the three months ended September 30, 2016, decreased to 18% compared to 22% for the same period in 2015.

Revenue for the nine months ended September 30, 2016, of $27.1 million, decreased 41% compared to $46.3 million for the same period in 2015. Decreased pricing and utilization as a result of lower drilling activities were the primary driver of lower revenue year-over-year.

Adjusted EBITDA for the nine months ended September 30, 2016, of $3.7 million, decreased 63% compared to $10.1 million for the same period in 2015. Adjusted EBITDA as a percentage of revenue, for the nine months ended September 30, 2016, was 14% compared to 22% for the same period in 2015.

Operating expenses for the three and nine months ended September 30, 2016, of $9.7 million and $19.6 million increased 15% and decreased 36% respectively compared to $8.5 million and $30.6 million for the same period in 2015. The decline in operating expenses during the first nine months of 2016 is a result of lower activity levels and cost reduction efforts.

Selling, general and administration costs ("SG&A") for the three and nine months ended September 30, 2016, of $1.5 million and $3.8 million decreased 22% and 32% respectively compared to $1.9 million and $5.6 million for the same period in 2015. SG&A costs decreased for the first nine months of 2016 due to cost reductions implemented by management including staff reductions, wage roll backs and reductions in discretionary spending.

U.S. Operations

Three months ended September 30,

Nine months ended September 30,

($000's)

2016

2015

% chg.

2016

2015

% chg.

Revenue

2,950

8,715

(66

)

10,251

32,208

(68

)

Operating expenses

2,403

6,117

(61

)

8,848

21,182

(58

)

Selling, general and administrative

858

1,323

(35

)

3,355

4,723

(29

)

Share based payments

14

(11

)

34

(3

)

Net (loss)

(4,028

)

(11,137

)

(13,107

)

(12,193

)

Adjusted EBITDA(1)

(325

)

1,286

(125

)

(1,986

)

6,301

(132

)

Adjusted EBITDA as a % of revenue

(11

)%

15

%

(19

)%

20

%

Capital expenditures(2)

774

473

64

1,214

2,453

(51

)

Gross capital assets

143,462

149,491

(4

)

143,462

149,491

(4

)

Total assets

73,341

98,418

(25

)

73,341

98,418

(25

)

Notes:

(1)

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

(2)

Includes assets acquired under finance lease and purchases of intangible assets.

Revenue for the three months ended September 30, 2016, decreased 66% to $3.0 million from $8.7 million for the same period in 2015. The decline in revenue is due to a combination of lower rental fleet utilization rates and average pricing, offset by a strengthened U.S. dollar when compared to the same period in 2015. During the third quarter of 2016, utilization rates for Strad's U.S. matting, surface equipment and solids control fleets declined by 15%, 13%, and 41%, respectively, compared to the same period in 2015. Pricing pressure in Q3 2016 contributed further to revenue declines. Both utilization and price declines year-over-year are the result of a decline in rig counts across all Strad's targeted resource plays in the U.S. average rig counts declined in the Bakken, Rockies and Marcellus regions by 61%, 49%, and 49%, respectively, during the third quarter of 2016 compared to the same quarter in 2015.

A slight increase in the matting fleet year-over-year partially offset declines in utilization rates and average pricing. The U.S. surface equipment fleet decreased by 21 pieces of equipment to 2,001 pieces as at September 30, 2016, compared to 2,022 pieces as at September 30, 2015. Strad's U.S. solids control fleet remained constant at 55 as at September 30, 2016. The U.S. matting fleet increased by 102 pieces to 13,104 as at September 30, 2016, compared to 13,002 pieces as at September 30, 2015.

Adjusted EBITDA for the three months ended September 30, 2016, decreased 125% to $(0.3) million compared to $1.3 million for the same period in 2015. Adjusted EBITDA as a percentage of revenue, for the three months ended September 30, 2016, was (11)% compared to 15% for the same period in 2015. The decrease in both adjusted EBITDA and adjusted EBITDA as a percentage of revenue is primarily due to the decline in revenue compared to the same period in 2015.

Revenue for the nine months ended September 30, 2016, decreased 68% to $10.3 million compared to $32.2 million for the same period in 2015. The year-over-year decrease in revenue was primarily driven by decreased utilization of Strad's matting, surface equipment and solid controls fleets.

Adjusted EBITDA for the nine months ended September 30, 2016, decreased 132% to $(2.0) million compared to $6.3 million for the same period in 2015. Decreased adjusted EBITDA was due to lower revenue and severance costs of $0.3 million compared to the same period in 2015. Adjusted EBITDA as a percentage of revenue for the nine months ended September 30, 2016, was (19)% compared to 20% for the same period in 2015.

Operating expenses for the three and nine months ended September 30, 2016, of $2.4 million and $8.8 million decreased 61% and 58% respectively compared to $6.1 million and $21.2 million for the same period in 2015. The decline in operating expenses during the first nine months of 2016 is a result of lower activity levels. A portion of the Company's operating expenses are fixed, thus the percentage decline is lower for operating expenses compared to revenue.

SG&A costs for the three and nine months ended September 30, 2016, of $0.9 million and $3.4 million decreased 35% and 29% respectively compared to $1.3 million and $4.7 million for the same period in 2015. SG&A costs decreased due to cost reductions implemented by management including staff reductions, wage roll backs and reductions in discretionary spending.

Product Sales

Three months ended September 30,

Nine months ended September 30,

($000's)

2016

2015

% chg.

2016

2015

% chg.

Revenue

3,597

3,225

12

7,725

11,031

(30

)

Operating expenses

3,240

2,911

11

6,701

10,527

(36

)

Selling, general and administrative

24

42

(43

)

44

126

(65

)

Share based payments

-

(3

)

-

-

Net (loss) income

(160

)

(45

)

(706

)

-

Adjusted EBITDA(1)

333

274

22

980

378

159

Adjusted EBITDA as a % of revenue

9

%

8

%

13

%

3

%

Total assets

137

149

(8

)

137

149

(8

)

Notes:

(1)

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS; see "Non-IFRS Measures Reconciliation".

(2)

Includes assets acquired under finance lease and purchases of intangible assets.

Product Sales are comprised of in-house manufactured products sold to external customers, third party equipment sales to existing customers and sales of equipment from Strad's existing fleet to customers.

Revenue for the three months ended September 30, 2016, increased 12% to $3.6 million from $3.2 million for the same period in 2015, resulting primarily from higher sales of third party equipment sales. During the third quarter, Product Sales consisted of $0.9 million of in-house manufactured products, $2.1 million of third party equipment sales and $0.6 million of rental fleet sales compared to $1.7 million, $0.4 million and $1.1 million, respectively, during the same period in 2015. Sales in the quarter were impacted by a significant decrease in demand, typical in the business when drilling activity levels decline.

Adjusted EBITDA for the three months ended September 30, 2016, remained consistent with the prior period at $0.3 million. Adjusted EBITDA as a percentage of revenue, for the three months ended September 30, 2016, was 9% compared to 8% for the same period in 2015.

Revenue for the nine months ended September 30, 2016, decreased 30% to $7.7 million compared to $11.0 million for the same period in 2015. Revenue was lower during the first nine months of 2016 due to decreased rig activity. Sales of Strad's rental fleet equipment fluctuate quarter-over-quarter and are primarily dependent on strategic opportunities to monetize underutilized rental assets.

Adjusted EBITDA for the nine months ended September 30, 2016, increased 159% to $1.0 million compared to $0.4 million for the same period in 2015. The increase in adjusted EBITDA was due to lower operating expenses during the first nine months of 2016 compared to the same period in 2015. Adjusted EBITDA as a percentage of revenue, for the nine months ended September 30, 2016, was 13% compared to 3% for the same period in 2015.

Operating expenses for the three and nine months ended September 30, 2016, of $3.2 million and $6.7 million increased 11% and decreased 36% respectively compared to $2.9 million and $10.5 million for the same period in 2015. Operating expenses adjust with business as activity levels vary.

OUTLOOK

During the third quarter, we noted an improvement in customer sentiment from the second quarter of 2016 due in part to strengthening commodity prices and improving supply and demand fundamentals within the industry. This improved outlook resulted in an increase in drilling activity and a corresponding increase in utilization of our equipment fleet during the third quarter compared to the second quarter of 2016. However, despite the increase in activity during the quarter, we continue to experience pricing pressure and we remain cautious in our outlook as activity levels could be sensitive to changes in commodity prices over the near term.

We made progress in our strategy to expand the Company's service offerings to the energy infrastructure market, including pipeline construction, power transmission construction and energy facilities construction, during the third quarter. Our focused sales efforts and attention on this customer vertical translated into the largest matting project in the Company's history for a new customer in the energy infrastructure segment. This has diversified the business into markets that are expected to be less commodity price sensitive in the near term and will continue to be a focus for the remainder of 2016 and into 2017.

Energy infrastructure related activity is expected to contribute meaningfully to our top-line during the fourth quarter and into 2017. The majority of Strad's energy infrastructure related work continues to be wood access matting related and focused in Western Canada. We are continuing to focus on the energy infrastructure market in the U.S.

We continue to actively manage our cost structure as activity levels increase to ensure the efficiencies we gained over the past eighteen months are maintained when the recovery eventually takes hold. Early in the third quarter, we increased our overall headcount with the addition of direct employees for the first time since commencing our cost management efforts in January 2015. We will continue to focus on cost discipline and debt repayment into 2017 as we expect pricing will continue to be competitive in all of the regions in which we operate.

Our prudent and measured approach with a focus on cash preservation, debt paydown and maintaining flexibility over the past eighteen months positioned us to merge with Redneck and Raptor, a leading operator in the northeastern British Columbia and northwestern Alberta regions on August 31, 2016. The transaction increases Strad's profile as a market leader in the Deep Basin with expanded operations in Fort St. John, Dawson Creek and Grande Prairie and broadens our product and service offering to the combined entities customers operating in the Deep Basin.

We will continue to focus on maintaining our balance sheet strength and financial flexibility to ensure we are positioned to take advantage of further opportunities.

LIQUIDITY AND CAPITAL RESOURCES

($000's)

September 30, 2016

December 31, 2015

Current assets

28,539

25,035

Current liabilities

18,572

12,632

Working capital(1)

9,967

12,403

Banking facilities

Operating facility

3,088

2,874

Syndicated revolving facility

25,761

15,500

Total facility borrowings

28,849

18,374

Total credit facilities(2)

48,500

70,000

Unused credit capacity

19,651

51,626

Notes:

(1)

Working capital is calculated as current assets less current liabilities.

(2)

Facilities are subject to certain limitations on accounts receivable, inventory, and net book value of fixed assets and are secured by a general security agreement over all of the Company's assets. As at September 30, 2016, Strad had access to $48.5 million of credit facilities.

As at September 30, 2016, working capital was $10.0 million compared to $12.4 million at December 31, 2015. The change in current assets is a result of a 16% increase in accounts receivable to $19.4 million for the third quarter of 2016 compared to $16.8 million for the fourth quarter of 2015. Accounts receivable increased due to an increase in activity late in the third quarter of 2016 compared to the fourth quarter of 2015. Inventory decreased by 21% to $4.1 million for the third quarter of 2016 from $5.2 million for the fourth quarter of 2015, and prepaid expenses was consistent at $1.5 million when compared to the fourth quarter of 2015. Inventory decreased due to the increase in Product Sales during Q3 2016 compared to Q4 2015.

The change in current liabilities is a result of a 63% increase in accounts payable and accrued liabilities to $14.5 million for the third quarter of 2016 compared to $8.9 million at year end. The accounts payable increase correlates to the increase in activity and operating expenses during Q3 2016 compared to Q4 2015. Bank indebtedness decreased to $3.1 million at the end of the third quarter compared to bank indebtedness of $2.9 million for the fourth quarter of 2015.

Funds from operations for the three months ended September 30, 2016, decreased to $1.5 million compared to $4.1 million for the three months ended September 30, 2015. Capital expenditures totaled $3.2 million for the three months ended September 30, 2016. Strad's total facility borrowing increased by $10.5 million for the three months ended September 30, 2016, compared to Q4 2015. Management monitors funds from operations and the timing of capital additions to ensure adequate capital resources are available to fund Strad's capital program.

As at September 30, 2016, the Company's syndicated banking facility consists of an operating facility with a maximum principal amount of $7.0 million CAD and $5.0 million USD, and a $36.5 million syndicated revolving facility, both of which are subject to certain limitations on accounts receivable, inventory and net book value of fixed assets and are secured by a general security agreement over all of the Company's assets. As at September 30, 2016, the Company has access to the maximum credit facilities. The syndicated banking facility bears interest at bank prime plus a variable rate, which is dependent on the Company's funded debt to EBITDA ratio. The Company's syndicated banking facility matures on September 29, 2018.

Based on the Company's amended credit facility, the interest rate will increase to bank prime plus 3.50% on prime rate advances and at the prevailing rate plus a stamping fee of 4.50% on bankers' acceptances during the covenant waiver period in the fourth quarter of 2016 and the first quarter of 2017. For the three and nine months ended September 30, 2016, the overall effective rates on the operating facility and revolving facility were 4.68% and 3.07%, respectively. As of September 30, 2016, $3.1 million was drawn on the operating facility and $25.8 million was drawn on the revolving facility. Required payments on the revolving facility are interest only.

As at September 30, 2016, the Company was in compliance with all of the financial covenants under its credit facilities.

The relevant definitions of financial debt covenant ratio terms as set forth in the Company's syndicated banking facility are as follows:

The above noted definitions are not recognized under IFRS and are provided strictly for the purposes of the financial debt calculation.

Financial Debt Covenants

September 30, 2016

December 31, 2015

Funded debt to EBITDAratio (not to exceed 5.5:1.0)

Funded debt

30,174

19,592

EBITDA (1)

9,390

20,264

Ratio

3.2

1.0

EBITDA to interest coverage ratio (no less than 3.0:1.0)

EBITDA (1)

9,390

20,264

Interest expense (1)

1,740

1,625

Ratio

5.4

12.5

Notes:

(1)

Includes trailing twelve months results of Redneck and Raptor in both EBITDA and interest expense.

On August 31, 2016, Strad amended its existing credit facilities to include amendments to financial covenants, an equity cure, as well as reduce the current limits from CAD $63.0 million plus $7.0 million USD to CAD $43.5 million plus $5.0 million USD.

NON-IFRS MEASURES RECONCILIATION

Certain supplementary measures in this press release do not have any standardized meaning as prescribed under IFRS and, therefore, are considered non-IFRS measures. These measures are described and presented in order to provide shareholders and potential investors with additional information regarding the Company's financial results, liquidity and its ability to generate funds to finance its operations. These measures are identified and presented, where appropriate, together with reconciliations to the equivalent IFRS measure. However, they should not be used as an alternative to IFRS, because they may not be consistent with calculations of other companies. These measures are further explained below.

Earnings before interest, taxes, depreciation and amortization and other adjustments ("adjusted EBITDA") is not a recognized measure under IFRS. Management believes that in addition to net income, adjusted EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. Adjusted EBITDA is calculated as net income (loss) plus interest, finance fees, taxes, depreciation and amortization, loss on disposal of property, plant and equipment, loss on foreign exchange, less gain on foreign exchange and gain on disposal of property, plant and equipment. Segmented adjusted EBITDA is based upon the same calculation for defined business segments, which are comprised of Canadian Operations, U.S. Operations and Product Sales.

Funds from operations are cash flow from operating activities excluding changes in working capital and foreign exchange gains and losses. It is a supplemental measure to gauge performance of the Company before non-cash items. Working capital is calculated as current assets minus current liabilities. Working capital, cash forecasting and banking facilities are used by Management to ensure funds are available to finance growth opportunities.

Certain statements and information contained in this press release constitute forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "plan", "continue", "estimate", "anticipate", "potential", "targeting", "intend", "could", "might", "should", "believe", "may", "predict", or "will" and similar expressions are intended to identify forward-looking information or statements. More particularly, this press release contains forward-looking statements concerning future capital expenditures of the Company and funding thereof, changes and expectations in margins to be experienced by Strad, anticipated cash flow, debt, demand for the Company's products and services, drilling activity in North America, pricing of the Company's products and services, introduction of new products and services and the potential for growth and expansion of certain components of the Company's business, anticipated benefits from cost reductions and timing thereof, and expected exploration and production industry activity including the effects of industry trends on demand for the Company's products. These statements relate to future events or to the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this press release. The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. In addition to other material factors, expectations and assumptions which may be identified in this press release and other continuous disclosure documents of the Company referenced herein, assumptions have been made in respect of such forward-looking statements and information regarding, among other things: the Company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current industry conditions; anticipated financial performance, business prospects, impact of competition, strategies, the general stability of the economic and political environment in which the Company operates; exchange and interest rates; tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services and the adequacy of cash flow; debt and ability to obtain financing on acceptable terms to fund its planned expenditures, which are subject to change based on commodity prices; market conditions and future oil and natural gas prices; and potential timing delays. Although Management considers these material factors, expectations and assumptions to be reasonable based on information currently available to it, no assurance can be given that they will prove to be correct.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with the Canadian Securities Regulatory Authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Company's website. The forward-looking statements and information contained in this press release are expressly qualified by this cautionary statement. The Company does not undertake any obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

A replay of the call will be available approximately one hour after the conference call ends until Friday, November 11th, 2016, at 11:59pm ET. To access the replay, call 1-800-408-3053, followed by pass code 1976204.

Strad Energy Services Ltd.

Interim Consolidated Statement of Financial Position

(Unaudited)

(in thousands of Canadian dollars)

As at September 30, 2016

As at December 31, 2015

$

$

Assets

Current assets

Trade receivables

19,441

16,754

Inventories

4,090

5,193

Prepaids and deposits

1,523

1,484

Income taxes receivable

3,485

1,604

28,539

25,035

Non-current assets

Property, plant and equipment

157,684

140,977

Intangible assets

583

800

Long term assets

2,000

2,184

Deferred income tax assets

159

210

Total assets

188,965

169,206

Liabilities

Current liabilities

Bank indebtedness

3,088

2,874

Accounts payable and accrued liabilities

14,516

8,881

Deferred revenue

-

94

Current portion of obligations under finance lease

968

783

18,572

12,632

Non-current liabilities

Long-term debt

25,761

15,500

Obligations under finance lease

357

228

Deferred income tax liabilities

11,053

6,536

Total liabilities

55,743

34,896

Equity

Share capital

135,843

118,401

Contributed surplus

12,183

12,012

Accumulated other comprehensive income

25,149

30,153

Deficit

(39,953

)

(26,256

)

Total equity

133,222

134,310

Total liabilities and equity

188,965

169,206

Strad Energy Services Ltd.

Interim Consolidated Statement of Loss and Comprehensive Income (Loss)

Cash and cash equivalents (including bank indebtedness) - end of period

(3,088

)

(5,345

)

Cash paid for income tax

-

1,908

Cash paid for interest

706

1,209

ABOUT STRAD ENERGY SERVICES LTD.

Strad is a North American energy services company that provides rental equipment and matting solutions to the oil and gas and energy infrastructure sectors. Strad focuses on providing complete customer solutions in Canada and the United States.

Strad is headquartered in Calgary, Alberta, Canada. Strad is listed on the Toronto Stock Exchange under the trading symbol "SDY".

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